Innovation Drive: Can Toronto Build the Car of the Future?

Uber wants to make Toronto a global research hub for autonomous driving vehicles. General Motors believes the city already is.

GM Canada has a team of 750 software engineers in the Toronto suburb of Markham, working on what it calls “the future of mobility.” It also has ambitious plans to open a experimental centre in the city’s east end, where consumers will be able to test self-driving cars, electric bikes and any other innovation that runs on wheels.

For the auto giant, the Toronto innovation drive is designed to get it closer to consumers and better understand how they’re adapting to radically new car technologies — and how that innovation can lead to better communities, safer roads and a new business model for mobility.

“We’re redefining ourselves in terms of mobility, as opposed to cars, trucks and crossovers,” said GM Canada’s president Steve Carlisle.

GM is in a race with Uber, Alphabet, Tesla and other car companies to develop self-driving cars that are safe, reliable and affordable. Earlier this week, Uber Technologies announced a new Toronto research team led by University of Toronto professor Raquel Urtasun that will be tasked with “transforming transportation.”

For both GM and Uber, Toronto has everything they need: great universities, a strong startup ecosystem, five million people, terrible traffic and four intense seasons that can test every on-board instrument in a car.

“We’re blessed with abundant crappy weather,’ Carlisle said, “so we should invest in it and play a global role there.”

Carlisle was onstage at Roy Thomson Hall for RBC Disruptors, a monthly speaker series focussed on innovation and disruption.

After emerging from the great recession as a shadow of its former self, GM has picked four channels of innovation: self-driving vehicles, electric vehicles, connected vehicles and shared vehicles.

Carlisle said the company wants to think about share of data and share of kilometres driven, rather than just share of new car sales.

“We need to think in terms of not just selling vehicles — but selling kilometres and gigabytes too … The idea is to get our minds moving beyond market share and sales and into share of kilometres ridden and share of data used.”

He can see a future in which fewer cars are sold but they’re used more through shared ownership, or ride-hailing of autonomous-driving vehicles. The average car is used around four per cent of the time.

While that may lead to fewer vehicle sales for GM, Carlisle says the difference will be made up by servicing and parts, as vehicles being used more often will wear out faster. There will be new business models, too, such as paying per distance.

The company already has its own car-sharing business, Maven, that is trying to better understand how quickly consumers are willing to change habits.

GM is already gaining some revenue from new data models, such as prompting drivers, through its OnStar service, with special offers at restaurants or shops along a highway, based in part on a driver’s habits. It typically gets a share of sales connected to drivers, if they’ve opted to share their data.

Today’s vehicles already have as much as two million lines of computer code in them. Tomorrow’s vehicles will be wired more than a typical space vehicle, enabling GM to build relationships with a host of other service providers wanting to reach consumers while they’re in their cars.

While self-driving cars — and the ensuing changes to our cities — are still years away, Carlisle said they’re coming sooner than most people think.

The biggest challenge is in the marketplace. Take electric cars. Despite being on the market for more than a decade, they account for half of one per cent of total sales. The same resistance could hold true for cars that pilot themselves.

“We all want to reduce greenhouse gases, but we’re all consumers as well,” he said. “When do we make the leap to being a part of that solution instead of perpetuating the status quo?”

Even if self-driving cars gain currency, Carlisle doubts the love-affair that many owners have with their cars will die. Instead, many will buy second cars for pleasure driving, while using autonomous-driving vehicles and shared vehicles for mundane trips. “Everyone loves driving,” he noted. “No one likes commuting.”

As Senior Vice President, Office of the CEO at RBC, John Stackhouse is responsible for interpreting trends for the executive leadership team and Board of Directors with insights on how these are affecting RBC, its clients and society at large. Prior to this, John was editor-in-chief of The Globe and Mail (2009-14), editor of Report on Business, the newspaper’s national editor, foreign editor and its foreign correspondent based in New Delhi, India (1992-99).

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